Assigned to GOV FOR COMMITTEE

ARIZONA STATE SENATE

Phoenix, Arizona

FACT SHEET FOR S.B. 1545

covered employees; uncovered status; moratorium

Purpose

An emergency measure that prohibits state agencies from exempting state employees from the state personnel system until December 31, 2003. Requires the Department of Administration (DOA) to submit a report on each state agency relating to state employee compensation to the joint legislative study committee on state employee compensation (SEC study committee) on or before December 15, 2001.

Background

Currently there is no statutory authority to support the exempting of employees from the state personnel system by state agencies with or without the knowledge or approval of DOA. Recent reports from members of the Arizona Federation of State, County and Municipal Employees (AFSCME) discuss the issue of state employees being exempted by state agencies from personnel rules coverage. According to these reports, employees in covered positions have been asked to give up their covered status in exchange for pay raises. For example, Arizona Department of Transportation employees were reportedly given 12 percent pay raises if they gave up their covered status. Those that did not, were reportedly given 6.5 percent pay raises.

In 1997 the 18 member SEC study committee was created to study various state personnel systems, state employee compensation and related issues including salary, benefits and employee turnover.

Due to the potential widespread effect of this legislation, the specific fiscal impact is unknown.

Provisions

1. Prohibits a state agency from exempting a state employee from the state personnel system until December 31, 2003.

2. Requires DOA to submit a report on each state agency relating to state employee compensation to the SEC study committee by December 15, 2001. The report is required to contain the following information:

a) the process the agency uses to exempt an employee.

b) the number of exempt employees employed by the agency, the date those employees were exempted and the reason each employee was exempted.

c) promotional or financial payment offered or given to the employee as motivation to give up merit system coverage.

d) verbal or written commitments offering continued due process protection to employees in exchange for exemption from merit system coverage.

e) the impact to the agency’s overtime budget due to exempting employees.

3. Requires the joint legislative study committee on state employee compensation, to:

a) review the report submitted by DOA.

b) hold public hearings intended to gather information. The hearing will also include an assessment by DOA on the impact that arbitrarily exempting employees will have on the overall state employee compensation system.

c) discuss, with a representative of the Wage and Hour Division of the U.S. Department of Labor, whether or not arbitrarily exempting state employees satisfies state and federal standards, specifically with respect to overtime pay.

d) Make recommendations, if any, for legislation.

3. Provides for a repeal date of December 31, 2003.

4. Contains an emergency clause.

Prepared by Senate Staff

February 22, 2001